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Three months ago, Roger Edgley, manager of
Wasatch International Growth
fund, uprooted his family from Salt Lake City to spend a year overseas. The sojourn, which started in The Hague, will take him from Europe to Asia, with a stop in Singapore and side trips to Thailand and Indonesia.

For Edgley, 58, who grew up in Hong Kong, it's a way to recharge, to meet executives of the far-flung companies the fund holds and to absorb the worlds of companies he might be interested in buying. "It's like when a professor goes off for a year somewhere else, and gets stimulated by meeting different colleagues," he says. "That's where the companies we invest in are."

Getting away from the herd is part of what makes Wasatch tick. Wasatch International Growth (ticker: WAIGX), with $1.4 billion in assets, has a portfolio that looks a lot different than your typical international equity fund: 75 holdings with a median market capitalization of just $2.3 billion. The portfolio is chock-full of names you've probably never heard of, like
Abcam ABC.Ln 1.3953488372093024%Abcam PLC ADRU.S.: OTCUSD10.9
0.151.3953488372093024%
/Date(1480980002000-0600)/
Volume (Delayed 15m)
:
69
P/E Ratio
40.14732965009208Market Cap
1999491034.07516
Dividend Yield
1.5213394495412844% Rev. per Employee
280455More quote details and news »ABC.LninYour ValueYour ChangeShort position
(ABC.UK), an online distributor of antibodies to researchers based in England, and
M32413.to 0.9149828440716736%M3 Inc.Japan: TokyoJPY2647
240.9149828440716736%
/Date(1481317200000-0600)/
Volume (Delayed 20m)
:
2167400
P/E Ratio
63.40119760479042Market Cap
871855804531.25
Dividend Yield
0.6800151114469211% Rev. per Employee
19406400More quote details and news »2413.toinYour ValueYour ChangeShort position
(2413.Japan), a Japanese company that provides health-care information to doctors. And while the vast majority of assets are in developed Asia and Europe—with Japan accounting for 25% of assets and the U.K., 16%—the fund's holdings spread as far afield as Cambodia, Turkey, and Nigeria.

That's the way Edgley—who is Wasatch's director of international research, along with overseeing three other funds—likes it, and investors have done well by the strategy. For the past five years, it's up an average annualized 26.8%, compared with the category's 21% rise, according to Morningstar.

"Wasatch does smaller-cap growth investing well," says Morningstar analyst William Samuel Rocco. "A hallmark for them is that whatever their universe is, they are searching far and wide. They're quite willing to go into emerging markets and smaller-cap stocks. That is a plus, but it comes with some risk."

Over much of Wasatch International Growth's history, Rocco notes, that strategy has given the fund a boost relative to its peers; but over the past year or so, it has become more of a head wind. Another caveat: Wasatch funds don't come cheap; the expense ratio for International Growth is 1.57%.

Edgley, a U.K. native and U.S. citizen, grew up in Hong Kong and England. He studied psychology at the University of Hertfordshire and then got two master's degrees, one in social psychology with statistics at the London School of Economics, the other in philosophy from the University of Sussex. He began his career as a consultant, but realized that the career wasn't numerical enough for him. So he became a banking analyst instead, joining Crosby Securities, now part of Société Générale, in Hong Kong. He later moved to the U.S. to join Chicago-based Wanger Asset Management, manager of the Acorn funds, as an Asian equities analyst, eventually becoming manager of the Acorn Foreign Forty fund and Wanger's director of international research. In 2002, after Wanger's asset-management business was sold, he joined Salt Lake City-based Wasatch Advisors to launch its international effort.

At International Growth, which Edgley has run since 2006, the team takes the classic Wasatch approach, searching out high-quality growth companies with strong balance sheets and the opportunity for sustained earnings growth—while also paying attention to valuation. They're unconstrained by geography or size, and pride themselves on finding businesses that others have yet to discover. Even when Edgley isn't spending a year abroad, he logs thousands of miles visiting companies and talking to management.

One of the portfolio's big themes today is the Internet's disruptive technologies, and how that has spread to unexpected areas and has enabled cross-border sales.

Wasatch International Growth

Total Returns*

1-Yr

3-Yr

5-Yr

WAIGX

24.94%

13.57%

26.84%

MSCI Eafe

20.21

7.59

12.11

% of

Top 10 Holdings

Ticker

Portfolio**

Wirecard

WDI Germany

2.83%

Start Today

3092 Japan

2.79

Kakaku.com

2371 Japan

2.74

Pigeon Corp.

7956 Japan

2.66

Abcam

ABC UK

2.57

Calbee

2229 Japan

2.46

Cosmos Pharma

3349 Japan

2.40

Rotork

ROR UK

2.29

Rightmove

RMV UK

2.13

M3

2413 Japan

2.11

Total:

24.98%

*All returns are as of 12/11; three- and five-year returns are annualized. ** As of 9/30. Source: Morningstar; Wasatch

So, for example, the fund's fifth-largest holding is Cambridge, U.K.-based Abcam, which provides antibodies to researchers via the Internet. Started in 1998 by a postdoctoral researcher who was studying the newly discovered breast-cancer protein BRCA2, the firm sells antibodies to scientists, along with comprehensive data sheets about them, online. "If you were trying to put the information about these antibodies into a catalog, you couldn't do it," Edgley says. "The beauty of the online model is that if you are a small company, and you are very good at something, you can become global very easily." The company's enterprise value (including both stock and debt) is 16 times next year's earnings before interest, taxes, depreciation, and amortization, or Ebitda.

Edgley has also invested in
Yoox Group
(YOOX.Italy), an Italian company that runs e-commerce sites for luxury fashion brands, and
ASOSASC.ln -2.3391812865497075%ASOS PLC ADRU.S.: OTCUSD60.12
-1.44-2.3391812865497075%
/Date(1481066401000-0600)/
Volume (Delayed 15m)
:
571
P/E Ratio
142.22853087295954Market Cap
5056945439.16738
Dividend Yield
N/ARev. per Employee
N/AMore quote details and news »ASC.lninYour ValueYour ChangeShort position
(ASC.UK), an online-only fashion and beauty retailer that's based in the U.K. but sells to over 240 countries. "One of the interesting things about retail is that it is hard to go across borders. Only a few companies have done it," Edgley says. "The models are changing. That's obviously a key theme in our portfolio, not just in retailing but in other areas as well."

At a time when so much money is chasing the same stocks, Edgley argues that looking further afield is actually less risky. In Japan, he notes, some of the most interesting companies have market capitalizations below $500 million. Where most investors see risk, Edgley sees opportunity.

"We're not frightened of under-the-radar companies. We're on the lookout for new companies, up-and-coming companies, where the rules are changing," he says. "The number of people thinking the same way is a lot larger than we think it is. You have to tread a different path."